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Take a look at this comprehensive Minnesota State legislative update prepared by our colleagues at Aging Services of Minnesota

 A Tale of Two Budget Bills

On April 24, 2013 by Christian Knights, Aging Services of Minnesota

Over the course of the last 10 days, the House and Senate have seen the bills that shape the future spending and policy for health and human services (HHS) in Minnesota progress rapidly through committees and onto their respective floors. Remember, these two bills are the framework that will be used to sculpt the final HHS bill that will be sent to Governor Dayton to sign into law or reject and send back to the Legislature.

Both bodies have been challenged to find a bill that doesn’t receive great criticism for multiple angles, which is mainly the result of the budget target they were given to cut $150 million of spending. The House and Senate took about their challenge in slightly different ways, and thus affect long term care providers in different ways. Here’s a quick snapshot of the two bills and status checks on their progress:

The House

The House bill (HF1233) reached the end of its House journey on April 22 after a nine hour debate on the House floor that concluded with a 70-64 vote to pass the bill. Its progress through committees and the House floor saw tweaks and additions along the way including some positives and some negatives.Snapshot View

  • Following an amendment by chief author Rep. Tom Huntley, nursing facilities receive a three percent increase in the first year of the biennium. Unfortunately, there is not a subsequent increase provided for the second year. Huntley said those who do the heavy lifting in the state’s nursing homes and long-term care facilities deserve a 10 percent pay increase, but the state can only afford the smaller bump proposed in the bill. The increase is tied to caregiver wages and will cost $14 million.
  • Home and community-based services (HCBS) also receive an increase for just one year of the biennium. The two percent increase is for all waiver programs and the total cost is $65 million.
  • The House will buy back the scheduled 1.67 percent provider rate cut that was set to go into effect for six months starting on July 1, 2013. Its total cost is $12.8 million.
  • The financing mechanism to fund the provider increases unfortunately does so by suspending the automatic adjustments in statute for nursing facilities both in the operating and property rates. This totals $19.6 million in 2014-15 and a further $52.4 million for 2016-17.
  • The House bill does include language for development of an HCBS report card, but does not include funding and the inclusion of the language to reform home care regulations/surveys.
  • A House floor amendment was successfully passed that reduces the surcharge by $440 per bed per year starting in July 2015. As the implementation date is delayed, the amendment has no impact on the state budget in the upcoming biennium. In the next biennium, it will reduce revenue to the state as the decrease in the per bed surcharge is not coupled with a reduction in the portion of the MA rate designed to cover the cost of the surcharge. As a result, once this decrease is effective, a facility with 80 beds for example would save over $35,000 in surcharge payments annually.
  • The House bill includes the providers’ compromise language on Home Care regulations that was negotiated with the Minnesota Department of Health, resulting in reforms to the home care survey process.

The Senate

On the heels of the House, the Senate HHS budget bill (SF1034) progressed through multiple committees and will be heard on the Senate floor this week. While having a slightly higher cut target than the House, the Senate was also able to offer some positives for both nursing facility and assisted living providers.

Snapshot View

  • Nursing facilities would be set to receive $20 million for the first biennium and $51 million in fiscal years 2016-17 through rebasing of operating payment rates. This will cost $20.2 million in 2014–15 and $51.7 million 2016-17. Not all nursing facilities will receive increases under this proposal as chief author Senator Tony Lourey said he was attempting to help the neediest the most.
  • HCBS receive a 1 percent increase on Jan. 1, 2015 and again on July 1, 2015 at a total cost of $7.3 million for in 2014-15 biennium and $75.5 million in 2016-17.
  • The Senate also includes provisions to buy back the 1.67 percent contingency rate cut that is scheduled to go into effect for a six-month period starting on July 1, 2013.
  • Just like the House, the Senate suspends the automatic adjustments in statute for nursing facilities both in the operating and property rates.
  • Originally included in the Senate bill was a nursing home surcharge that proposed to raise $16.5 million in 2014-15 and $15.3 million in 2016-17. However, this was removed in the Senate Finance committee with health care access fund dollars used to fill the funding void.
  • Along with our Long Term Care Imperative partners, we were successful in adding language to allow the commissioner to reduce the case mix penalties on providers in certain circumstances.
  • Again, just as in the House, the Senate included the provider compromise language on the home care regulations changes.

The Senate still has the no doubt lengthy process of passing the bill off the Senate floor and, just as in the House, there is the strong possibility of multiple amendments being offered from both sides of the aisle. Once the bill does pass, the penultimate task of combining the two bills into one in conference committee will commence. This means there are still plenty of moving parts as we progress toward session end on May 20. Stay tuned.

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